It’s IPO time for Coursera

In 2011, Stanford Professor Andrew Ng, with help from Daphne Koller, posted videos from his machine learning course. In a few weeks, more than 100,000 learners saw it. To put it in perspective: the course at Ng’s campus would involve around 400 students per year. This meant that he would have to teach for 250 years to achieve the same levels achieved on Coursera.

Ng and Koller realized that using a MOOC (Massive Open Online Courses) platform could be transformative for education. This would mean that many more people could benefit from it, regardless of geography or economic situation.

Although there have been many other MOOCs, Coursera has become one of the most important. And yes, the company is now preparing to go public.

According to Ng’s letter to shareholders in S-1: “We believe that education is the source of human progress. In today’s economy where the skills needed to be successful change rapidly, education is becoming more important than ever. As automation and digital disruption are poised to replace an unprecedented number of jobs globally, giving workers the opportunity to upgrade and retrain will be key to raising global living standards and increasing l social equity. Online training will play a vital role, enabling anyone, anywhere, to acquire the valuable skills they need to make a living in an increasingly digital economy. “

Coursera offers content from over 200 educational institutions and businesses. The approach of the program – which includes over 4,000 courses – is to make it “stackable”. This means that a person can gradually learn a particular area.

But the content is also personalized by leveraging machine learning. After all, Coursera has the advantage of having access to large amounts of data on over 220 million registrations. For example, Coursera’s skill charts have sophisticated models that help provide better paths for job skills.

Strategy and market opportunity

Coursera’s business model is based on a flywheel approach, which provides price advantages over costs. The S-1 notes: “We believe our model of effective learner acquisition, fueled by high quality free content, global partner brands, deep expertise in search engine optimization, strong references from Word of mouth, public relations and a paid affiliate marketing channel, allows us to attract learners to Coursera on a large scale. “

Here are some of the offers:

• Specializations: For $ 39 to $ 99 per month, a learner can get relevant content for over 500 categories.
• MasterTrack Certificates: During a period of three to twelve months, a learner can obtain a certificate issued by a university. The price ranges from $ 2,000 to $ 6,000.
• Bachelor’s or master’s degrees: these have fees that range from $ 9,000 to $ 45,000.
• Coursera for Enterprise: This program involves the deployment of the learning platform for businesses, educational institutions and governments.

There is no doubt that the market opportunity is huge. In 2019, spending on global higher education was $ 2.2 trillion, according to a study by HolonIQ. As for the category of online degrees, it stood at $ 36 billion in 2019 and is expected to reach $ 74 billion by 2025.

Considering Coursera’s strong brand and expansive platform, he has a good chance of getting an oversized slice of the opportunity. Consider that he has 77 million registered learners.

And the financial data has been strong. In 2020, revenue jumped 59% to $ 293.5 million. Of course, one of the main reasons for this was the Covid-19 virus, which led to significant demand for e-learning.

Still, the company recorded a loss of $ 66.8 million in 2020, down from a loss of $ 46.7 million in 2019. But that was to be expected as the company increased its investments to meet demand. .

As for the IPO, it should hit the markets next month. The company plans to list its shares on the NYSE under the symbol COUR and major underwriters include Morgan Stanley, Goldman Sachs, Citi and UBS Investment Bank.

To M (@ttaulli) is an advisor / board member of startups and the author of Artificial Intelligence Basics: A Non-Technical Introduction, The Robotic Process Automation Handbook: A Guide to Implementing RPA Systems and Implementing AI Systems: Transform Your Business in 6 Steps. HWe have also developed various online courses, such as for the COBOL and Python Programming languages.